Background The aim of this study was to investigate the combined effect of mesenchymal stem cells (MSC) and local delivery of tacrolimus (FK506) on nerve regeneration when applied to nerve autografts and decellularized allografts. Methods A three-dimensional in vitro compartmented cell culture system consisting of a neonatal dorsal root ganglion adjacent to a nerve graft was used to evaluate the regenerating neurites into the peripheral nerve scaffold. Nerve autografts and allografts were treated with (i) undifferentiated MSCs, (ii) FK506 (100 ng/mL) or (iii) both (N = 9/group). After 48 hours, neurite extension was measured to quantify nerve regeneration and stem cell viability was evaluated. Results Stem cell viability was confirmed in all MSC-treated grafts. Neurite extension was superior in autografts treated with FK506, and MSCs and FK506 combined (p < 0.001 and p = 0.0001, respectively), and autografts treated with MSCs (p = 0.12) were comparable to untreated autografts. In allografts, FK506 treatment and combined treatment were superior to controls (p < 0.001 and p = 0.0001, respectively), and treatment with MSCs (p = 0.09) was comparable to controls. All autograft groups were superior compared to their respective allograft treatment group (p < 0.05) in neurite extension. Conclusions Alone, either MSC or FK506 treatment improved neurite outgrowth, and combined they further enhanced neurite extension in both autografts and allografts.